The last time you opened your mailbox and were greeted by your insurance bill, you might have been surprised to notice an increase in your insurance premiums. All across the United States, insurance rates regularly increase as a result of inflation. However, recent events and realities in the state of Louisiana have caused premiums to skyrocket – sending the insured into a panic.
If you have noticed an increase in your auto insurance premiums recently, here are a few reasons why you and your wallet are suddenly hurting.
Louisiana Residents are Widely Underinsured
Individuals who own a motor vehicle are required to carry insurance on their car equal to the limits of liability outlined by the law. In the state of Louisiana, the limits of liability are 15/30/25 or:
- $15,000 per person in medical damages
- $30,000 per accident in medical damages
- $25,000 per accident in property damage
Many people choose to carry these limits of liability because each one is required by the state and because it’s the only amount of coverage they can afford.
The issue with these limits of liability is they’re deficient compared to the actual costs incurred in an accident. Therefore, many insurance companies are receiving minimum premiums and paying out maximum damages all across the state. So to make up for their lost money, they respond by raising prices.
Insurance Companies Predict Future Catastrophic Loss
It’s no secret that the state of Louisiana is vulnerable to catastrophic disasters such as hurricanes that can cause significant damage. Any time a catastrophic event occurs, insurance companies lose more money. Today, insurance companies use innovative technology to predict the possibility of catastrophic events each year. When the probability is high, the prices of insurance rise.
If it’s been a few years since the last catastrophic event, or one has just occurred, you can expect to see a rise in your insurance costs and start paying out more for your coverage.
High Accounts of Auto Losses
Thanks to cell phones and social media, distracted driving and accidents related to it are on the rise. In fact, 25% of all auto accident-related deaths are caused by distracted driving each year. Accidents that cause damage to cars and injuries to people mean big money paid out by insurance companies for medical claims and vehicle losses. As a result, insurance companies begin to charge more to make up for their lost profits.
In Louisiana, each of these factors, among many others, contributes to you experiencing a rate increase in your auto insurance. If you are facing difficulty paying your insurance bill, never respond by reducing the coverage you carry on your vehicle. Reducing coverage could put you in an even worse financial situation in the case of an accident. Instead, call your insurance company and ask to verify any discounts you are eligible for or shop around for a better price.
Experienced and Dedicated Louisiana Accident Attorney
In the event that you’re involved in a car accident and are having problems getting your insurance provider to provide full compensation, seeking the advice of trusted legal counsel is the best way to ensure that you get protected.
At the Law Offices of E. Orum Young, we have 30-plus years of serving the citizens of Louisiana in all personal injury matters. Our personal injury attorneys work to understand your case, limit the bias associated with car accidents, and earn the compensation you deserve. Regardless of the circumstances around the accident, we’re confident our experience and expertise can give you the trusted legal counsel you need.
To schedule a free consultation or case review, call us at (318) 303-4194 or complete our online contact form.